NEW PRODUCT

DEVELOPMENT

Email
BBA R1
id:
6 Semester
Islamya University Bahawalpur
Ranger Campus
th
Faizluckyshah@gmail.com

By Falcons Group

Contents
Objectives of the report............................................................................................................. 4
EXICUTIVE SUMMERY.......................................................................................................... 4
TOPIC ANALYSIS:................................................................................................................. 5
Product design...................................................................................................................... 5
Over view of the product:........................................................................................................... 5
Why do people choose Finger chips chili flavor in the market?..............................................................5
Business Strategy................................................................................................................... 6
Our Business Strategy: Adding Flavors.......................................................................................... 6
Location Strategy................................................................................................................... 6
Our New Product Development Idea:............................................................................................ 7
Idea Screening...................................................................................................................... 7
Concept Development and Testing............................................................................................. 11
Final Design....................................................................................................................... 11
Types of Processes............................................................................................................... 12
Assemble-to-order strategy...................................................................................................... 12
Product Life-Cycle................................................................................................................ 12
PLC Stages........................................................................................................................ 12
Product development Stage..................................................................................................... 12
Introduction Stage................................................................................................................. 12
Growth............................................................................................................................. 13
Maturity Stage..................................................................................................................... 13
Declining Stage................................................................................................................... 13
Conclusion......................................................................................................................... 13
Bibliography........................................................................................................................ 14
Books:.............................................................................................................................. 14
Web Sites:......................................................................................................................... 14

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Falcons Group
Faiz Ahmed shah (04)
Umair khan (37)

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Objectives of the report

The main purpose of this report is to know about the process of new product development and other
purpose with related this process.
However, the objectives of this report can be summarized in the following:

To define what is new product?

Finding and developing new-product and ideas.
Learning the steps in the new -product development process.
To understand about new product development strategy.

Learning the stages in Product Life Cycle process

EXICUTIVE SUMMERY

A manufacturing company must have a product to produce and to deliver to its consumers. This product
is the life of this company. Thats why a company should select and produce such product which will be
profitable for the company as well as beneficial for the targeted consumers. This product can help the
company to run a long way and to achieve the expected amount of profit.
As a business man, we thought about such kind of product which would be profitable for us and fill the
necessity of the consumers
From this thought, we have searched for ideas of some new products. We have looked for different
sources. And we got huge ideas of new products. But most of these could not fill our expectations. Thats
why we were looking for more and more and finally we got some good ideas.
At this time we started to select the best one which would be the most preferable for people and have a
great potentiality in future.
Finally we have selected a new product idea. As Pakistani people love food so we have selected food
business to start with. Fast food is the food that can easily be prepared and served quickly. Peoples eat
those foods that are delicious and with no time can easily be made.

There is never any better time to start business of fast food because it can be
started in any season and in any area.
There is an opportunity for big profits

Fast foods are not unhealthy and have calories, fat, sodium and sugar and also less nutrition and
vitamins that are very important for our life.
The business of fast food is very profitable business and can be started with less investment.
There are many places that affect the fast food business that can be public
areas like parks, business areas, schools and many other places.

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Any meal that dont take much time to prepare can also be considered as fast food but the term fast food
always refer to those foods that are sold in restaurants or cafeterias. Fast food is basically a preheated or
precooked food that is served to customers in a packed form so that they can take food with them.

TOPIC ANALYSIS:
Product design
Product design defines a products characteristics, such as its appearance, the materials
it is made of, its dimensions and tolerances, and its performance standards.

Over view of the product:

Finger chips chili flavor is made by potatoes, vegetable oil, chili powder, Ground cumin, dried onion,
garlic powder, cayenne pepper, white sugar, salt.
Finger chips chili flavor is not available in market (may be in some restaurants but not at local points
like streets parks and schools)

Why do people choose Finger chips chili flavor in the market?

Finger chips chili flavor is new taste in the market

The price of this product is low.
We have tested the market (1 day)

Business Strategy
Whether it is a small startup stand of French fries or a restaurant like Mc Donalds or anything, business
remains business. All its demands need to be fulfilled. We just need to play smart cards and keep updated
with market of our nearest competitors in the area. We need to provide customers with some unusual and

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unique services that they have never experienced before at your competitor. These strategic steps can be
taken in the form of keeping low prices, maintaining high quality, best of the attitude with the customer or any
additional thing with our stall.

Our Business Strategy: Adding Flavors

As we become a little known with our business in our area and start getting a good sales outcome, just
thinking of making some extensions, with all the profit and a little investment, start making flavored French
fries. There are different flavored sauces and powders for topping like chili, pepper, cheese, garlic, mayo and
a lot more. French fries lovers always look for something new and creative being done with their love of the
life. The more flavors or toppings we add on, the longer gets the queue in front of our stand.

Location Strategy
Schools (The Knowledge School), university (IUB University Chowk), Streets and Park (BWP zoo)

Our New Product Development Idea:

For developing new product successfully, a company must understand its consumers, markets and
competitors and develop products that delivers superior value to consumers and take plan.
The systematic source for our products idea. We have developed our product by using these sources.

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Customers:
Our target customers are school children. Children love French Fries they buy French
Fries again and again (even of common taste) we have a sense of what customers want they
want new taste

Competitors
French Fries Business increasing in the market. We studied our competitors in local
areas no one is delivering flavored French fries they all have common type of French fries
so we have an opportunity to launch new flavor they were selling their product at Rs 50/.25
kg But our new Finger chips chili flavor is of low price (40 Rs/.25 kg) with same quantity
but new flavor.

New products are important to both customers and the marketers who serve them. For companies new
products are a key source of growth. In this report we are showing our new product development idea.
Our new product development idea is about Finger chips chili flavor.

Idea Screening
At first, a company generates huge ideas in order to find a few good ones. Ideas can be generated from
internal as well as external sources. The purpose of succeeding stages is to reduce that numbers. The first
idea-reducing stage is idea screening which helps to select some good ideas and drop poor ones as soon
as possible. Then an idea is taken for developing a new product such as Finger chips chili flavor
Different ideas we generated
Taste: There were different flavored sauces and powders for topping like chili, pepper, cheese, garlic, mayo
and a lot more. We selected one of those, chili flavor not all, if we get satisfied with chili flavors results we will
think about other new flavors
Equipment: After selecting taste it was the time to implement so we have different ideas for implementing
Purchase equipment or get on rent etc. so

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Breakeven Analysis:
Equipment on Rent (1 day)
Variable
Fixed
Cost
Potatoes
Equipment
OIL
Cart Total Cost
Wages
Other cost
Total Cost

Cost
150
20
430
400
100
0

Profit /
Loss
199
0
288
0
890

Revenue
Sale Price
160
Total Cost18
Units
Total Revenue
288
Total Revenue
0
Profit

FC
QBE =
SPVC
QBE =

15
40
55

1000
=10
16055

So we will cover all cost by selling 10 units

If sale per day is 18 units we are earning profit
So profit is 890 and monthly will be 26700

Equipment purchased (1st month)

Variable
Fixed Cost
Potatoes
Equipment
OIL
Total Cost
Cart
Wages
Other cost
Total Cost
Revenue
Sale Price
160
Total
Cost
Units
300
Total
Revenue
480
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Total Revenue
00
loss

Cost
15
400 40
00
55
100
00
130
00
100
00
730
Profit /
00
Loss
895
00
480
00
415
00

QBE =

FC
SPVC

QBE =

73 000
=695
1605 5

So we will cover all cost by selling 695 units

If sales are monthly 300 units we are in loss
So loss is 41500 monthly (per day 1383)
We are in loss because purchased equipment which was costly

Profit on Equipment Purchased (2nd month)

Variable
Fixed Cost
Potatoes
Equipment
OIL
Cart Total Cost
Wages
Other cost
Total Cost
Revenue
Sale Price
160
Total Cost330
Units
Total Revenue
528
Total Revenue
00

QBE =

FC
SPVC

QBE =

23000
=21 9
1605 5

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Profit

Cost
0
0
130
00
100
00
230
00

15
40
55

Profit /
Loss
236
05
480
00
291
95

So we will cover all cost by selling 219 units

If sales are monthly 330 units we are earning profit
So profit is 29195 monthly (per day 973)

Profit on Equipment Purchased (3rd month)

Variable
Fixed Cost
Potatoes
Equipment
OIL
Cart Total Cost
Wages
Other cost
Total Cost
Revenue
Sale Price
160
Total
Cost
Units
360
Total Revenue
576
Total Revenue
00

QBE =

FC
SPVC

QBE =

23000
=219
16055

Profit

Cost
0
0
130
00
100
00
230
00

15
40
55

Profit /
Loss
236
60
576
00
339
40

So we will cover all cost by selling 219 units

If sales are monthly 360 units we are earning profit
So profit is 33940 monthly (per day 1131)

Profit on Equipment Purchased (4th month)

Variable Cost
Fixed Cost
Potatoes
15
Equipment
0
OIL
40
Cart Total Cost
0
55
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Wages
Other cost
Total Cost
Revenue
Sale Price
160
Total
Cost
Units
390
Total Revenue
624
Total Revenue
00

QBE =

FC
SPVC

QBE =

23000
=219
16055

Profit

130
00
100
00
230
00
Profit /
Loss
237
15
624
00
386
85

So we will cover all cost by selling 219 units

If sales are monthly 390 units we are earning profit
So profit is 38685 monthly (per day 1290)

Profit:

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Concept Development and Testing

After developing concept, Finger chips chili flavor needs for testing with a group of target consumers.
So we will test concept by presenting to consumers on small geographical area. Result of this test will
help the company to decide about the potentiality of Finger chips chili flavor. We will start by a stall in
front of a school.

Final Design
After product tested for a day and as we are satisfied with result we are now ready to deliver it on
different areas. (University Chowk, Zoo)

Types of Processes
Process type in our business is Repetitive Operations (line processes)
We are producing few standardized products in high volume
In our operation

Product variety is small

High degree of standardization
Production is based on future forecast of demand
Assemble-to-order strategy

We prepare our product (cut potatoes and produce French fries) but add flavor (toppings)
on demand of customer (add chili flavor or not?)
INGREDIANTS
PROCESS IT
POTATOS OIL ETC

PRODUCE

CUSTOMER ORDER

DELIVER IT
FRENCH FRIES

ADD CHILI FLAVOR

French fries prepared ahead of time but are assembled (add flavor) based on specific
customer requests

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Product Life-Cycle

PLC Stages

Product development Stage

Begins when the company develops a new-product idea

Sales are zero
Investment costs are high
(It was when we were not selling our product but when we purchased equipment and raw material
and trained our labor 1st day of our business)
Introduction Stage

Low sales
Negative profits
(1st month When we sold 1-694 units it was the introduction stage)
Growth

Rapidly rising sales

Rising profits
Growing competition
(2nd month when sold new 330 units (695-1025 units overall) it is our growth stage)
(3rd month when sold new 360 units (1025-1385 units overall) it is our growth stage)
(4th month when sold new 390 units (1385-1775 units overall) it is our growth stage)
Maturity Stage
Our Product not matured
Declining Stage
Our Product not reached this level

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Conclusion

This assignment was very help full for us to understand how we can start our business in a market? How
can implement strategies? How will develop new product? And what type of processes we use? What
stages our product faces?

Bibliography

Books:
Operations Management (Sanders & Reid) 4th edition

Web Sites:
http://www.smartearningmethods.com
http://www.google.com.pk
http://www.businessideas.pk

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